1/18/13 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC
CLOSING GRAIN COMMENTS:
Early session grain price‐action seemed to be held in‐check by somewhat
bearish expectations of updated 2013 acreage estimates by a well‐known
private firm; but once these numbers were released a little before
lunchtime on Friday, prices turned higher led by short‐covering and new
weekly highs in Chicago Wheat.
Probably adding‐to the increased confidence by wheat bulls was the fact
that updated Noontime Weather Models continued to show very little in the
way of precipitation for the extremely dry southern and central plains
wheat belt. As a result, new‐crop July Wheat in Chicago was able to get
back to levels not seen since the end of December.
While corn was helped and pulled higher by the wheat, the bean complex
seemed under the negative influence of the spreads at the end of the
week—technically overbought conditions in the March‐July Bean Spread is
probably at the heart of the weaker soy trade, as was the fact that the
meal market was being sold and spread against the bean oil.
Agro Consult’s updated Brazilian Production figure of 84 MMT released
late on Thursday also probably helped keep the beans soft as we finished
out the week, as did stronger Dollar trade over in the currency market.
I also noted a little backing‐off on spot meal basis on Friday at some of
the interior river locations as crush margins have fallen below 50 cents
in the last few days. All these features combined seemed to keep the
beans in the red heading into the long holiday weekend.
CLOSING LIVESTOCK COMMENTS:
It was another rough day in the livestock pits on Friday, as the bearish
cattle trade, which started on Thursday afternoon, continued to influence
the futures traders into the week’s close. In the last three days of the
week’s trade, February Live Cattle dropped 5%, or nearly $6 per hundredweight,
as the closing of a large cattle processing plant in Texas pushed
producer prices lower due to expectations of reduced kill capacity.
With the cattle weakening even further and dropping to close to their
contract lows from back in April, the hogs had little chance on holding
early gains; after testing the 40‐day Moving Avg. near the weekly highs,
February Hogs sold‐off the last half of Friday’s session alongside the
cattle. Fortunately, however, the lead‐month hogs didn’t take‐out
Thursday’s low so the charts look a bit better heading into the 3‐day
Helping to keep the hogs from falling even more was probably the fact
that Feeders actually stabilized and closed a bit higher on Friday; the
lower supply of cattle on‐feed probably gave the futures a bit of
For more information go to Globalanalytics.biz and Please Remember: There is a substantial risk of loss
in trading futures and options, and the impact of cycles or current events on prices may be already
reflected in futures.
Copyright, 2012 Global Commodity Analytics & Consulting LLC